How IT wisdom affects firm performance: An empirical investigation of 15-year US panel data

• Published in: Decision Support Systems Vol. 133; p. 113300
• Main Authors: Liu, Yucong, Lee, Younghwa, Chen, Andrew N.K.
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01-06-2020; Elsevier Sequoia S.A
• Subjects: Changing environments; Data analysis; Empirical analysis; Firm performance; IT business value; IT wisdom; IT-enabled organizational capabilities perspective; Longitudinal studies; Meta-capability; United States > US; Firm performance; IT business value; IT-enabled organizational capabilities perspective; Meta-capability; IT wisdom
• ISSN: 0167-9236; 1873-5797
• DOI: 10.1016/j.dss.2020.113300

This paper introduces the concept of IT wisdom from a perspective of meta-capability and establishes the relationship between IT wisdom and firm performance. We propose that IT wisdom as a holistic meta-IT capability of a firm can strategically enable and exercise suitable IT capabilities and organizational capabilities to adapt to changing environments for improving firm performance. We test our hypotheses with panel data collected from 26 US companies over 15 years. The results of data analysis show that IT wisdom is significantly related to firm performance indicated by both accounting-based measures and market-based measures. Theoretical and practical implications of the findings are presented.
•We introduces the concept of IT wisdom and establishes the relationship between IT wisdom and firm performance.•IT wisdom as a holistic meta-IT capability can strategically enable and exercise suitable IT and organizational capabilities.•We test our hypotheses with panel data collected from 26 US companies over 15 years.•IT wisdom is significantly related to firm performance indicated by both accounting- and market-based measures.